Yves Smith of Naked Capitalism submits:
Bloomberg tells us that sales of 2 million pound ($4 million) homes and flats in London are on hold as buyers pull back, expecting subprime woes to put a damper on City bonuses this year.
Note that that price level is considered mere “mid level luxury,” and still won’t get you very far in uber pricey Mayfair or Belgravia.
Buyers of London houses and apartments costing about 2 million pounds ($4 million) are delaying purchases on concern the turmoil in credit markets may result in lower bonuses for bankers….
Asking prices in Kensington and Chelsea, London’s priciest borough, fell 1 percent this month to an average of 1.45 million pounds, Rightmove Plc, which runs the U.K.’s largest real estate Web site, said in a report Aug. 20….
Properties at the top end of the market, those costing an average of 5 million pounds, have risen 36 percent in the past year as foreign buyers join Britain’s very wealthy to compete for a shrinking number of trophy houses, according to Knight Frank.
The banking bonus season runs from November to March and the level of payouts will be determined by third quarter earnings, said Michael Karp, chief executive officer of the Options Group, a New York-based firm that tracks pay and hiring trends.